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Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 6, Problem 6.20E
Exercise 6.20
LO 3, 4, 6, 8
Transaction analysis-various accounts Prepare an answer sheet with the following column headings. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on assets, liabilities, and net income by entering for each account affected the account name and amount and indicating whether it is an addition (+) or a subtraction (-). Transaction a has been done as an illustration. Net income is not affected by every transaction. In some cases, only one column may be affected because all of the specific accounts affected by the transaction are included in that category.
a. | Assets | Liabilities | Net Income |
Recorded $600 | Accumulated | Depreciation | |
of depreciation | Depreciation | Expense | |
expense. | -600 | -600 |
- Sold land that had originally cost $117,000 for $102,600 in cash.
- Recorded a $612,000 payment for the cost of developing and registering a patent.
- Recognized periodic amortization for the patent (in part c) using the maximum statutory useful life.
- Capitalized 328,800 of cash expenditures made to extend the useful life of production equipment.
- Expensed $14,100 of cash expenditures incurred for routine maintenance of production equipment.
- Sold a used machine for $81,000 in cash. The machine originally cost $270,000 and had been
depreciated for the first two years of its five-year useful life using the double-declining-balance method. (Hint: You must compute the balance of the accumulated depreciation account before you can record the sale.) - Purchased a business for $2,800,000 in cash. The fair values of the net assets acquired were as follows: Land, $400,000; Buildings, $1,800,000; Equipment, $900,000; and Long-Term Debt, $600,000.
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Chapter 6 Solutions
Accounting: What the Numbers Mean
Ch. 6 - Prob. 6.1MECh. 6 - Prob. 6.2MECh. 6 - Mini-Exercise 6.3 LO 3 Depreciation calculation...Ch. 6 - Prob. 6.4MECh. 6 - Mini-Exercise 6.5 LO 9 Goodwill Backstreets Co....Ch. 6 - Prob. 6.6MECh. 6 - Exercise 6.7 LO 1 Basket purchase allocation...Ch. 6 - Prob. 6.8ECh. 6 - Prob. 6.9ECh. 6 - Prob. 6.10E
Ch. 6 - Exercise 6.11 LO 3 Effect of depreciation on ROI...Ch. 6 - Exercise 6.12 LO 3 Financial statement effects of...Ch. 6 - Exercise 6.13 LO 3 Depreciation calculation...Ch. 6 - Exercise 6.14 LO 3 Depreciation calculation...Ch. 6 - Prob. 6.15ECh. 6 - Prob. 6.16ECh. 6 - Prob. 6.17ECh. 6 - Exercise 6.18 LO 9 Goodwill-effect on ROI and...Ch. 6 - Exercise 6.19 LO 6, 8, 9 Transaction...Ch. 6 - Exercise 6.20 LO 3, 4, 6, 8 Transaction...Ch. 6 - Prob. 6.21PCh. 6 - Prob. 6.22PCh. 6 - Prob. 6.23PCh. 6 - Problem 6.24 LO 3 Partial-year depreciation...Ch. 6 - Problem 6.25
LO 3
Identify depreciation methods...Ch. 6 - Prob. 6.26PCh. 6 - Prob. 6.27PCh. 6 - Prob. 6.28PCh. 6 - Prob. 6.29PCh. 6 - Prob. 6.30PCh. 6 - Prob. 6.31PCh. 6 - Prob. 6.32PCh. 6 - Prob. 6.33CCh. 6 - Prob. 6.34CCh. 6 - Case 6.35 LO 3, 6 Capstone analytical review of...
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